Alfred Sloan "He designed his company around the needs of his customers (“a car for every purse and purpose”) - in trying to please all, ONE Pleases NO ONE.

There is a definite hint of blaming the workers for its demise: not so: the workers did not force the companies to make hundreds of model creating thousands of mold,parts; they did not force the company to write contracts which included high bonuses, build exotic skyscrapers for their playhouses, create the lemon industry to support the part industry, design vehicle that a small bump costs thousands of dollars because of car design, design wheel hubs so ice, snow and mud would prematurely wear out tires, reduce the size of studs till they are no longer bolts, use the uni-body model so that again the lightest bump twist the unit out of line, install options that vastly increased the cost, advertise the hell out of the customer and saying this is"what the customer wants". Any worker that would have suggested to have 3 sizes (sml) of each major line with parts interchangeable other wise that vehicle IS NOT ALLOWED TO BE SOLD IN NORTH AMERICA PERIOD, would have been fired. The workers did not lobby the government that the company was too big to fail. Its funny how workers representing 6-8% of company costs weld so much power. Oh, could I add that the workers did not force the company to have large expensive models to be build and sold to Canadians or prevent the company from using covered nuts ( it was too high tech for this company leaders!

I would like to know when adjectives became the new facts. If you call someone greedy well then it must be so.

Through the Ministry of International Trade and Industry the Japanese government has subsidized and protected its automobile companies. Through the banks they have sought market share over profits at the expense of shareholders. There isn't an automaker in existence that isn't subsidized by its home country. In America the states subsidize their foreign automakers at tax payer expense but that seems to be ok for the "America First" party.

GM had a great advantage after WWII when most of the rest of the world was in ruins. In the after math other countries were allowed to protect their own markets as they grew, this with the understanding that they would become consumer based and their markets would open. This reciprocity never seems to have happened. It seems protectionism is good for everyone else just not America.

First, I'm guess you don't really distinguish North from South Korea given your Kim Jong Il remark. Second, Korea's import tariff for cars is about 8%, which is not particularly high, and it will soon be abolished vis-a-vis the USA (and perhaps EU). Third, what do you think the market share for German cars in Germany, French cars in France, Japanese cars in Japan is like? The decline of American car market share in the USA can be attributed to terrible quality (compared to price) and fierce competition since it is the largest market where everyone wants to enter.

Hyundai attained 80% market share after acquiring its biggest rival, Kia about ten years ago and in many cases, they still act like two separate entities. Daewoo was bought by GM (and is one of the few profitable subsidiaries), Samsung motors by Renault and SSangyong by a Chinese firm. Also, the market for foreign based cars is growing exponentially. But even if US cars were imported, do you think Koreans would by them? Even if we consider the quality comparable (which is not), American cars are generally too big, guzzle too much (fuel prices are triple in Korea), and the service network can be no way as quick and efficient as those of local brands...and Koreans are fickle service customers! Basically, given the size of the Korean market and the intensity of local competition, many foreign companies just aren't bothered to develop the Korean market.

Koreans are crazy about imported cars...but only if they bring something to outweigh the vastly higher maintenance costs. The imported luxury car market has been booming for years now. And now, middle class Japanese (towards whom we don't have such good sentiments) and European cars are starting to do very well because of their quality and fuel efficiency.

Before judging the Korean market with sparse information, look at all the other markets with national brands...it seems that they are all at least oligopolistic in nature. America is the big exception in this and you might as well blame, well, GM and all the darn competition it faced at home.

If US company want to sell cars to countries such as China, Korea, Japan, Russia; they need to build factory in those countries, becase the tariffs are very high. GM can only sell car in China because they build factory there and all cars GM sold in china are built in China. Same is true for US, Toyota sell car in US by building their cars in US.

The GM problem is no different than big business or big goverment. 'Too big to care':
1. Fat and sloppy -- Vanity
2. Greed
3. Ignorance
4. Unabated narcissism

To Manage a good business is not from simple reliance upon computerized (black and white) empirical data type categories, but from ambitious caring creative thinking people with their own skin in the game whom understand that answers are generally grey and not black or white.

That comment "when the US passed the emission standards,detroit hired hundreds of lawyers to fight it,whereas in japan we hired hundreds of engineers and solved the problem.now you call us unfair competitors.to me that seems harsh .it's an issue of values .you are litigious society which puts a premium on legal solutions,we promote and reward problem solvers."

Is absolutly true!!! WOW! I have just graduated college but I actually cannot believe that is really what was going on in the 70s! I feel like in a lot of ways America should be the business leaders of the world but we really are not if that was GM's response.

Being young and seeing this is a major wake up call. Your never safe in business and when you are at equilibrium your company is already dying (someone said that i forget).

I am disapointed with my country's government over a vast number of years that claims to be capitalist but they decide to make protectionist policies.

many moons ago in the early 70's decade the japanese ambassador spoke at harvard and commented on the auto industry.my best recollection of the essence of his remarks follows
" when the US passed the emission standards,detroit hired hundreds of lawyers to fight it,whereas in japan we hired hundreds of engineers and solved the problem.now you call us unfair competitors.to me that seems harsh .it's an issue of values .you are litigious society which puts a premium on legal solutions,we promote and reward problem solvers."
and then he smiled and added
" and remember some of the best firms in the US were run into the ground by harvard grads":)

I cannot understand how giving the UAW a piece of the action (ownership) in these companies will help solve their problems. The new "Government Motors" will have to protect GM to protect it's own investment.

Will GM get preferential treatment over the foreign manufacturers and Ford?

The American car industry does NOW make good cars. They are higher in cost which hurts sales. American car companies also don't market their cars very well. GM was enven competing against itself with all the brand names and models.

Finally, cars being better made last longer. Americans used to tradde in their cars every 2 or 3 years. There is no reason to do this now - too costly and too reliable. There is more production worldwide than there is demand. What happens when China, India, and Brazil start exporting cars?

Additionally, CAFE standards are bad for the environment. Increasing mpg artificially causes more miles to be driven, which burns more gasoline, which has to been drilled in countries with atrocious enviromental standards.

Plus CAFE causes cars to be produced at a loss, because some people really do need a truck or SUV for their capacity, materials or people. This puts more cars on the roads which causes more gasoline to be burned.

A gas tax without CAFE standards would use a cost mechanism to increase mpg as people opt for better mileage over electric power for HP, DVD screens, GPS, Bluetooth, huge sound systems and other such luxury items.

The price of small cars would be raised if small cars weren't sold at a loss, so less would be on the road. And the cost of operating a car would increase so less miles would be driven, especially by teenagers who drive around aimlessly and just hang out in the moving car.

And after you raise the gas tax and reduce consumption you could allow more drilling here where safety standards are higher and there will be less enviromental impact than say Nigeria.

I am too young so cannot comment on the decline of GM, but the fall part is easy. It's the government's fault.

Foreign auto companies make better small vehicles than American companies and they do it cheaper. American companies make better larger vehicles than their foreign competitors and make huge profits per vehicle. So why would GM keep building small cars they can't sell, requiring them to reduce the price and lose money on when they do sell one. Because of the CAFE standards that force them to do so.

Dump the CAFE, get a gas tax which increases our governemnt revenue, reduces payments to foreign governments, and allows for Econ 102 principle of relative advantage.

I would say that this provides two lessons for anyone who thinks that the know business. The first is that there is no such thing as an impossible scenario, and the second is that it is at the height of stupidity to try to deny reality. There is no such thing as a company that is too powerful to ever fall, and if your business practices are out of date then there will inevitably be a day when your Goliath is brought down. Delaying that simply increases the damage.

GM and Chrysler should have gone into liquidation. This whole "Chapter 11" charade that Obama and the Democrats have confected is nothing more than a post-election payoff to its organized labour supporters who provide the left with many of the election workers that they need to keep their grip on power.

Another very well written piece, albeit one i cant agree with. The following statement captures the mindset that destroyed GM and will, in time, put other car makers at risk:

"GM’s demise should not be read as a harbinger of doom for the car industry. All around the world people want wheels ..."

This suggests car makers are & have been selling dreams. Well, in a violently changing world dreams die first.

At the heart of any business should be the fulfilment of a need. A car maker is essentially in the transportation business. If you understand this you can then assess the market accurately. You would understand when the market is fundamentally saturated (as in the UK). It's all good when the economy is great and pple have a lot of money; they can afford to change cars every few years. When there's a downturn however a new car is put on the back burner as it isnt strictly essential to their transportation needs (the old car wld do). Obviously cars dont last 4ever and need to be replaced but you can better estimate market size if you relate it to transportation needs.

If only the American public knew of the management inside GM and how things really get done, they'd want their taxpayer dollars back, scratch their heads at the awards for excellency that GM has won of late, and sit for a good deal of time in silent astonishment.

That's the way most GM employees (in-the-know) feel each and every day on their way to work. It's truly amazing that any decent-ish models get the green light to go ahead. If only you knew the full story of what goes into vehicle development. GM is a giant corporate chicken with its head lopped off. In the Tech centre in Warren nothing had changed apart from the car park half emptying. The design managers still roll up and wield absolute authority. There's no questioning their opinions or decisions whatsoever - full stop. Call it design tyranny and they're GM's kings.

Unfortunately for the company's longterm prospects, these same design divas were responsible for the bulk of the horrorfest of 90s vehicles. One of their loftiest in command is the designer of the PT Cruiser itself, just to underline the sad point. They themselves have never ever touched Photoshop (the key sketch program for designers), and many are dimensionally (apart from aesthetically) blind; that is, they are incapable of visualising a drawing in three dimensions. This, I must stress, is a serious handicap for a vehicle designer to have. It would be equivalent to a journalist or a writer not having a clue as to syntax and punctuation.

This is the real sorry state GM has sunk to. Notice how it has little to do with the UAW and the usual trouted-out fare of explanations and excuses. But then again I'm saying here, in a way, it's not any of GM's fault. It's Michigan's. Entitlement is the keyword here. The spoilt and inept offspring of the children of the original world-class managers and brilliant designers in the 50s and 60s have done it to themselves. They unfortunately, having had it so good for so long (Oakland my county, was once the richest in the US and is packed with mansions), don't even realise that.

The illustration on this article is inaccurate. The mouth of the creature has the hood/grill of a Ford F-150, early 1990's model. Ford hasn't collapsed, So this was a lack of detail from the author and illustrator.

GM's management deserves plenty of blame, as does the misguided attempts of the gov't to protect it. But save a lot of the blame for the UAW, who made the cost of producing an American car so much higher than those of foreign competitors. More than any gov't policy, that's what forced the American co.s to make big SUVs and trucks, and reduced the amount of money available to develop new models.

Gov't policy should never again shield companies from the market. But America also should never again allow a labor monopoly to develop in a concentrated industry.

Hyundai has just recently managed to bash out decent vehicles, after decades in the business. Its share of the domestic Korean market? About 80 percent. I admire their achievement, but if anyone can articulate a free-market scenario in which 80 percent of a population would choose a Hyundai, then I am Kim Jong Il.